Comments

If more sellers mean higher prices, then prices would drop as items get sold as there are less sellers left with stock. So the highest prices would be at EOL and slide down from there. And that doesn't happen.

I think I just heard @pharmjod's head explode. And frankly, this misses the entire point of understanding a market... and is just another regurgitation of the 'scalper' theory. It feels correct, but isn't. The 'scalper' still has to actually sell the 'inflated' priced item.

I don't know how else to explain myself. The scalper does NOT have to sell their item to affect prices. Having those higher prices out there makes people who are selling at lower prices feel much more comfortable with setting their prices higher.

And that is just one way the market can be affected. Again, my entire point is that you cannot definitively say that more sellers = better prices.

OK. Put a Wall-E on bricklink for $1m and see what happens to the average price of sold sets over the next month.

You guys are funny. I think we all understand how basic economics works and that more competition is supposed to result in lower prices for all. We also all understand that the people with the lowest prices will sell first.

But there are people currently in the market that are setting their prices artificially high and that is affecting the market. And historically that has happened in other markets as well.

I remember when The Phantom Menace came out. There were tons of people buying action figures thinking that the prices were going to skyrocket due to how expensive certain figures from the 80's were to collect. There are still shops where I've seen those action figures for $30 but I've also seen people clearing out their buy in stock at garage sales for $1 a figure. So that market mostly sorted itself out. Took quite a while though.

I could list a ton of other markets that have been affected buy new seller expectations. My point is that right now, this market is being affected by the expectations of new sellers. It won't last forever, and is most likely on the decline, but it is happening. I'm sure you can find examples that show the opposite but for those of us on the buying end of things the trend is more sellers with higher prices.

So you think if there were less sellers the problem would be better? Of course after market prices will be higher than RRP - but with more resellers that level of highness is brought down.

Like you said about artificially high prices - that worsens with less sellers. With more you have people trying to undercut one another to get the sales.

"So you think if there were less sellers the problem would be better?"

Yes, I do, with new, in-demand sets that are not available on the primary market because they have all stock moved to the secondary market. #75192 is the perfect current example of this.

"Of course after market prices will be higher than RRP"

So the prices DO go up when more sellers are involved.

"but with more resellers that level of highness is brought down.Like you said about artificially high prices - that worsens with less sellers. With more you have people trying to undercut one another to get the sales."

More resellers certainly means they have incentive to compete - but most won't get all the way back down to MSRP for items like #75192, because they paid MSRP to get the product. But a few primary market vendors, like Toys R US, Walmart, and Target, each with thousands of units to sell, will drive prices lower than having 1000 individual resellers with one each to sell. Absent a primary market, having a lot of resellers in the secondary market is a very good thing.

Im not even sure what points being made here. Most anything in any collectible market will never be back at MSRP after it's out of the market.

This isn't some opinion based thing - more resellers will drive competition. If you had one reseller of (Lets say Jabbas Sail Barge) they would charge the absolute highest price possible. More sellers gives consumers more options - and seeing as there's no price fixing/collusion among so many sellers (which could also only happen with a few sellers) consumers overall prices are driven down.

I love the sarcasm by the way. Yes, I'm saying that it totally makes sense to put your prices millions above market price. Yeah, that will drive up all the prices. Makes total sense.

Back to reality though, I think we can all say that demand has also increased. More people are getting into LEGO than ever before. An increase in supply AND demand results in a change in the average price of item. Whether it is up, down, or stays the same depends on how much each of those shift. I think that currently both have shifted enough to increase prices. I can draw a graph if you don't know how that works ;)

Also, all of you snarky blokes are completely ignoring my statements about these newbies that are messing with the market. It happens all the time! Real estate, collectibles, bit coin, new investors mess up markets all the time. It goes beyond simple 10th grade supply and demand. And no, I'm not talking about scalpers. I'm talking about people that don't understand a particular market jumping in with both feet.

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me. Supply and demand theory is about equilibrium price and where it ends up over time, it isn't how you describe the day to day heartbeat of the market.

Why do I still have a stack of Tower Bridges (that have essentially cost me money to hold) and no Imperial Frigates (of which I think the least amount I made was 400% profit) when all sets were bought in the same transaction?Supply vs Demand...

I also think that the average EOL LEGO buyer is pretty savvy. When you take ancillaries like shipping, insurance, customs duty and local taxes into account (which sometimes can apply at both ends) it makes it much more difficult to calculate regional differences. The buyers however, in nearly every instance, are well aware of what to pay to sellers in each region. This is also affected by time and the climate of the market within individual regions. As an example, prior to around 05/06 I could walk into most Australian retailers, pay RRP (or a little bit less) and almost always double my money selling to US based buyer. Fast forward to now and I'm extremely lucky if I can buy a set for close to US RRP.

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

^ I've always felt that the difference between scalpers and resellers is a matter of timing. Scalpers buy up high demand or reduced price items to flip for short term profit. Resellers buy up items to sell for higher profit over the long term.

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

In the context of describing a market 'RRP' is an arbitrary term. If doesn't matter what a seller thinks a product is worth - the market sets the price for a product. Thus why my German CMF set isn't going to sell for $300M, even though that is my RRP.

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me.

In the context of the LEGO secondary market, it's just about as close to a free market as possible. Yes, there are people that buy or sell sets way above or way below the market price. And finding equilibrium isn't instantaneous. However, markets follow supply and demand. Everytime. All the time. For every buyer that pays too much, there is a buyer that gets a below market deal.

In this context I intended RRP to mean the price of current sets direct from LEGO or high street retailers. Scalpers buy current sets from retail stores so there's no stock left and then flip for a profit causing consumers to either go without or pay over the odds.

How about a youtube video that explains increasing supply and demand. Supply and demand is not as simple as everyone likes to say. It's just like in chemistry class. In yheory if you mix element A with element B it yields X grams of element C. But when you run the experiment you get Y grams of element C. Reality is messier than theory.

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me.

In the context of the LEGO secondary market, it's just about as close to a free market as possible. Yes, there are people that buy or sell sets way above or way below the market price. And finding equilibrium isn't instantaneous. However, markets follow supply and demand. Everytime.

Yes, in this we absolutely agree. Everyone agrees to this. The current equilibrium price is in flux. Due to too many sellers messing with the market.

I also think that the average EOL LEGO buyer is pretty savvy. When you take ancillaries like shipping, insurance, customs duty and local taxes into account (which sometimes can apply at both ends) it makes it much more difficult to calculate regional differences. The buyers however, in nearly every instance, are well aware of what to pay to sellers in each region. This is also affected by time and the climate of the market within individual regions.

I would say that this is true about AFOL's. However, I think the people on this forum too often forget that we are a drop in the bucket compared to the rest of the market, even the aftermarket. Most people in the world are buying sets for their kids or grandkids and are not fans themselves.

I think all of us are savvy and smart. I will never pay RRP for a LEGO set. Neither will most others on this forum. But the vast majority of the world is pefectly cool with paying full price. Same thing happens on eBay, Craigslist, Bricks and Minifigures, BrickLink, etc.

I watched the video, and perhaps you don't realize that it bolsters what I've (now) repeatedly posted. The only definitive conclusion the video notes is that if you increase both supply and demand, then there is a higher equilibrium quantity.

The graphs in the video also indicate unless you know exactly how much either (or both) supply and demand increase, you cannot ascertain the resultant price. That's why you can't draw an exact conclusion to the question asked.

In this context I intended RRP to mean the price of current sets direct from LEGO or high street retailers. Scalpers buy current sets from retail stores so there's no stock left and then flip for a profit causing consumers to either go without or pay over the odds.

Perhaps I should clarify - a 'scalper' is a pejorative term for a type of seller. However, a seller - no matter the moral connotations - is only able to sell an item or product at what the market will bear.

A supply shortage or a sharp lack of demand are outside factors that certainly effect markets, but are also the factors that bring the market to equilibrium. LEGO underproduced Minecraft sets, overproduced UCS B-Wings. But for the most part people purchased both products at the equilibrium market price.

With all this talk of reselling and secondary market value, for a page or two there I actually forgot what thread I was reading.

Just to make things perfectly clear, I think we are talking about counterfeit resellers who sell genuine products at an inflated price in a forged secondary market of legal clones and illegal copies.....what is there to be confused about? :)

It makes the debate / argument about whether it's a Polish or French supermarket selling copies (on page 5 of this thread) seem quite on track!

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

Yes. But you're not 'artificially' reducing supply. You are participating in the market by purchasing product. You could be considered making a wise investment... 10,000 years ago I got my hands on four Tickle-Me Elmos (Elmoes?). One paid to rebuild the engine in my car, another got me a nice promotion and pay increase, another paid my gas for 12 months, and the last is in my basement. But because I consider all of those outcomes to be noble, I wouldn't consider myself a scalper. But I got WAY more than RRP for those annoying toys.

Just keep in mind that nobody feels any sympathy for the person that buys up the tickets and then can't sell them on the street immediately before the event!

(I happen to agree with your underlying point that it is immoral or wrong to scalp/profiteer LEGO.)

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

Yes. But you're not 'artificially' reducing supply. You are participating in the market by purchasing product.

I think we agree, but scalper market manipulation is quite a specific (and immoral) subset of market participation. That's why retail stores often have a limit to the number that can be purchased by an individual.

Back to reality though, I think we can all say that demand has also increased. More people are getting into LEGO than ever before. An increase in supply AND demand results in a change in the average price of item.

I actually think secondary market demand has decreased significantly over the past few years. If not in raw numbers, certainly in proportion to sellers and availabile secondary market inventory.

Through a variety of means, LEGO (and maybe Lepin even!) have managed to significantly impact that dynamic.

Well, I went back to the Chinese supermarket in Poland last week and they are still selling the most appalling sets, including some from Lepin. The worse sections was the minifigures they had, but I was getting strange looks taking photos of the sets so didn't push it! (You can see numerous boxes behind the Lepin Ninjag set)

I put the "Sqonyy" one in just because it amused me how they try to avoid using official names by poor spelling, and even my young son (in fact he spotted it before me) could recognise a counterfeit PS controller!

In
fact this Chinese supermarket probably has every IPR infringement you
could imagine and LEGO copies are just a small part of the shop! I still find it strange that some European countries seem to accept these supermarkets, like this one that has been in existence for about 5 years at least?

Wow, that joystick will only shock you twice? I’d have thought it would give an electric shock with every use :-P

You are quite right, but I don't think it would probably even work long enough to give you a shock! I should have said, the price on that deadly controller was £5, which should set alarms bells ringing for anyone!

The LEGO copies ranged from £5 for the Angry Birds to £25 for the Frozen Palace, so you can see the attraction for parents. In Poland, the prices were cheap by Polish standards as they were easily half (or more) what you might pay for the genuine article.

Some of the reputable Polish shops selling genuine LEGO sets are charging similar prices to what you would pay in the UK, making them out of reach of many, as in most countries where parents do not have as much disposable income as they would wish.

Some of the weird names the chinese knock-off merchants come up with are so funny, when it comes to action figures, I've seen Avengering Heros, Justice Fighters, Teen-Aged Freak Fighter Turtles, Hereos of Justices, Avengerers of Justice, etc, etc...

If one is to understand the great mystery, one must study all its aspects, not just the dogmatic, narrow view of the LEGO. If you wish to become a complete and wise collector, you must embrace a larger view of the bricks.

...just as a followup - just recently I went to go buy two $20 sets (track accessory kits) that I bought a few months ago, only to find it discontinued and people selling for 3x the price. Screw that. If Lepin or anyone else wants to sell me an equivalent for $20 or less, I'm on it.